Canfor Reports Operating Losses, Curtailments Amid Market Challenges

SEATTLE (Scrap Monster): Canfor Corporation and its subsidiary Canfor Pulp faced a challenging second quarter in 2024, as reflected in their recent earnings call. The company reported significant operating losses in both its lumber and pulp businesses, citing difficult operating conditions and constrained access to viable fiber.

Despite these setbacks, Canfor announced positive developments in certain areas, such as its European operations and the Kootenay region of British Columbia. The company also discussed its financial position, capital spending plans, and inventory levels in the context of the current market environment.

Key Takeaways

Canfor announced the permanent closure of the Polar sawmill and suspension of a new Houston sawmill project.

The company plans to reduce operating schedules by 90 million board feet.

Canfor's European operations delivered strong earnings despite supply chain disruptions.

Canfor Pulp saw improved pricing but lower production due to maintenance and repairs.

Financial highlights include an operating loss of $231 million in lumber and $6 million in pulp.

The company has $140 million in net cash and is monitoring market conditions for future decisions.

Canfor expects the DIY segment in Europe to perform well in upcoming quarters.

The R&R segment in the lumber industry remains above pre-COVID levels, with no significant weaknesses in specific regions or products.

Company Outlook

Canfor is closely monitoring supply chain disruptions and the softwood lumber dispute.

The acquisition of the El Dorado facility in Arkansas is expected to close soon, with a planned investment of $50 million.

The company has the flexibility to make decisions based on market conditions and is prepared for the ramp-up of new facilities.

Canfor's Swedish mills will continue to ship 10-15% of products to the U.S. with no major changes expected.

 Courtesy: www.investing.com